MAHALAKSHMI SUGAR MILLS CO. LTD. Vs. CCE

JUDGEMENT

(1.) There is a duty demand of Rs. 1,05,300 and penalties of Rs. 1,06,000 and Rs. 2000. The duty demand is on the basis that when stock taking was done (by dip reading) in the appellants molasses storage tank by Central Excise Officer on 8.9.98 there was a shortage of about 280 qtls. Further, the appellant has also declared a shortage of 1826 qtls. Hence, duty demand has been made and penalties imposed on the appellants.

(2.) The explanation of the appellant is that the difference in quantity is on account of evaporation and other natural reasons. It is also being submitted that this aspect remains recognized by the department and under Board Circular dated 18.7.83 it has been advised that storage loss upto 2% is required to be condoned, during the hearing of the case, learned Counsel emphasized that the shortage in the present case is below, at the rate of 0.2%. The learned Counsel has also submitted that there is no evidence, whatsoever, that would allow the Revenue to take a contrary view, inasmuch as there is not even an allegation of clandestine removal of the goods. He also submitted that apart from the loss during storage, there is also the aspect of error in dip reading.

(3.) I have perused the records and heard the learned DR also. There is no justification for the demand of duty or imposition of penalty in the present case. Except for the shortage noted on stock taking, there is no evidence suggestive of clandestine removal or sale of the goods. Shortage upto 2% remains accepted by the Board Circular due to natural causes, while shortage in the resent case is well below this. The impugned order is not sustainable. It is set aside and the appeal is allowed.